The new Chancellor of the Exchequer, Rachel Reeves, will announce her first Budget on Wednesday 30 October, where she will set out the Labour government’s tax and spending plans, accompanied by a fiscal forecast from the OBR.
Labour has pledged to make the tax system fairer, deliver economic stability with tough spending rules, and grow the UK economy - all whilst keeping taxes, inflation and mortgages as low as possible. However, there have been numerous warnings from various economic bodies, including the Institute for Fiscal Studies, about the need to raise taxes and introduce spending cuts, in order to manage public debt. It will be interesting to see which way Reeves chooses to jump – it seems likely she will need to do both.
With a huge majority and in a honeymoon period with the public, there could be no better time for the new Government to take potentially unpopular decisions in their upcoming Autumn Budget."
Patrick King, Tax Partner
Tinkering with taxes
Despite pledging not to raise taxes for working people, or the headline rate of income tax, national insurance or VAT, Labour could still tinker with all of these, for example by removing zero rated VAT status in other areas beyond private school fees or extending the freeze on income tax thresholds.
There is considerable speculation already that Rachel Reeves will use her Autumn Budget speech to announce changes to capital gains tax and pensions tax relief, as well as reforming inheritance tax. What other tax reforms and changes could be on the horizon?
Take a look at the specially curated insights below from our tax and industry specialists with what to expect in the Autumn Budget 2024, and tips on planning ahead.
Business Taxes
Business owners should expect a wide range of changes which will affect their businesses both positively and negatively.
Scotland may not see the full impact of the change to a Labour government - certainly on taxation - until the Scottish Government elections in 2026. It could be viewed as a sign of things to come north of the border, however 2 years is a long time in politics.
Fiscal policy can significantly affect the business environment and thus influence investment decisions. With Labour now in power, there is growing uncertainty about the future of tax reliefs for businesses.
Capital Gains Tax (CGT) normally arises when an asset is sold for greater than its original cost and typically, occurs when a company is sold and the owners wish to extract value from their business.
Personal Taxes
Contrary to their manifesto promises, Labour’s spending plans must mean they will opt for raising taxes.
Prior to the general election earlier this year, plans for reforming, or even abolishing the tax had been mooted by the previous administration. Now that we have a new government in place, it seems that IHT rises could be on the horizon.
Indirect Taxes
The Labour administration now needs to implement one of its key tax plans, to impose VAT on private school fees.
Air Passenger Duty (APD) has been around since 1994. It is a tax on flights, paid by passengers, collected by airlines and paid over to the Treasury so the cost of collection to the Treasury is very low.
Industries
So, the election is out of the way and a new Labour government in place, we now need to look solely at their manifesto in the hope that pledges made on housing were issued with good intent.
Labour has proposed significant changes that could reshape the landscape of innovation and scientific progress in the UK.
Stay updated with MHA
Ahead of the Autumn Budget, our tax experts and industry specialists will be sharing their insights on the measures that would best support UK industries and individuals in the medium and long term. Stay updated on the latest developments right here on our dedicated Autumn Budget hub.
Our tax and economic experts
Professor Joe Nellis
Economic Adviser to MHA
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Patrick King
Tax Partner
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James Kipping
Tax Partner
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Chris Denning
Corporate and International Tax Partner
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Rachel Nutt
Tax Partner
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Alison Horner
VAT & Indirect Tax Partner
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Tax measures from the Autumn Budget will have wide-ranging impacts on industries and businesses across the UK. Our tax experts and industry specialists will be happy to help you adapt and reassess your financial plans in the light of any tax cuts and legislative changes arising from these fiscal announcements.
Contact your usual MHA representative or your nearest office at any time to discuss your tax matters further or for guidance on the measures announced, and we will be happy to assist with any queries.
